Standing Committee A

[Mr. David Amess in the Chair]

Railways Bill

David Amess: May I begin by wishing everyone a very happy new year? I remind the Committee that we have completed consideration of clauses 1 to 5 and schedules 1 to 4, and are now due to consider clause 6.

Greg Knight: On a point of order, Mr. Amess. This point does not relate to what you just said and I do not necessarily ask you for a definitive ruling today, but you might reflect on it and perhaps raise it when you next speak to other members of the Chairmen's Panel.
For the past 10 months, the hon. Member for Scarborough and Whitby (Lawrie Quinn) has been applying to the Speaker for a debate in Westminster Hall on community railways. That debate was finally granted today and is taking place concurrently with our sitting this morning. Therefore, two members of this Committee—the Under-Secretary of State for Transport, the Member for Staffordshire, Moorlands (Charlotte Atkins), and my hon. Friend the Member for Christchurch (Mr. Chope)—cannot be with us because they must answer that debate. 
When sittings take place in more than one venue in this Palace, as has happened for centuries, it is sometimes difficult to co-ordinate business. However, given that the hon. Member for Scarborough and Whitby has been applying for a debate on railways for 10 months and that there would have been a clash with this Committee for only two sitting weeks during that time, those who advise the Speaker could have ensured that such a clash did not take place. I hope that someone will reflect on that.

David Amess: The right hon. Gentleman has made a genuine point of order, which is why I allowed it to be heard. The Chairmen's Panel is considering the issue, and evidence has already been given on the subject to the Modernisation Committee. I will pass on his remarks to the Chairman of Ways and Means.

David Wilshire: On a point of order, Mr. Amess. Have you received any approach from the Government this morning to end this sitting early so that we can all witness the amazing spectacle of the Prime Minister and the Chancellor being in the same place and saying the same thing when they unveil a poster—

David Amess: Order. I am not minded to hear the hon. Gentleman any further.

Column Number: 114Clause 6

Clause 6

Financial assistance etc. from the Secretary of State

David Wilshire: I beg to move amendment No. 52, in page 6, line 15, leave out subsection (3).

David Amess: With this it will be convenient to discuss amendment No. 53, in page 6, line 23, at end insert
'and fairly to all parts of the United Kingdom.'.

David Wilshire: I am not sure whether to speak further to my point of order, or whether wishing you, Mr. Amess, and the rest of the Committee a happy new year is the best way of resuming.
I do not want to delay the Committee for long on this pair of amendments. Clause 6(3) states: 
 ''Agreements or other arrangements entered into by the Secretary of the State under this section may be entered into on whatever terms, and subject to whatever conditions, he considers appropriate.'' 
Contrary to the Minister's views, I listen to what he says and sometimes take it on board and think that he has a point. When my colleagues and I have tried to add something to the Bill, we have often been told that it is unnecessary.

Greg Knight: Otiose.

David Wilshire: I cannot rise to the levels of my right hon. Friend, who is a solicitor; I am a layman who does not quite get his mind around things. Unnecessary is what I think otiose means, and if not, I am sure someone will put me right.
I therefore say to myself that subsection (3) must be necessary because the Minister tells me so and has included it in the Bill. It is only when I try to add things to the Bill that I am told that they are unnecessary. Will he tell us why the subsection is necessary? Does he imagine that the Secretary of State will want to do whatever he fancies, including acting unreasonably? I would have thought that if the Secretary of State did something, we could leave it to a test of reasonableness in the courts. Presumably, the Government have in mind the Secretary of State acting utterly unreasonably, because the Minister is asking us to give a blank cheque to the Secretary of State to do whatever he likes—fair or unfair, reasonable or unreasonable.

Greg Knight: Will my hon. Friend explain why he feels that we should support amendment No. 52, which would leave out subsection (3)?

David Wilshire: I would have assumed that in the absence of a subsection telling the world that the Secretary of State can do whatever he likes, however unreasonable, there must always be a test of reasonableness. That would be one way of ensuring that the Government behave themselves, rather than do just as they please. The Minister may say otherwise, but I am sure that if I had tabled an amendment saying that the Government were to behave reasonably, he would have told me that that was unnecessary, because  the Government always behave reasonably. That is why, on this occasion, I have concluded that the Government do not intend to behave themselves, and that the subsection gives them a blank cheque.
The Minister has included in the clause a provision requiring the Secretary of State to act consistently, perhaps because the Minister feels that the Secretary of State might be inconsistent unless he is told not to be. However, I think that if he is required to be consistent, he should also be fair. The purpose of amendment No. 53 is to tidy things up and to help the Minister to present us with government that is both consistent and fair.

Tony McNulty: May I start by wishing everyone a happy new year? I hope that, by the end of the year, hon. Members will find themselves in roughly the same positions as at the beginning of the year.
I believe that the amendment is not unnecessary or otiose, but inappropriate, because it would remove the explicit power of the Secretary of State to make grants, loans, guarantees or investments in respect of the railway on terms that he sees fit. Although the amendment would not prevent him from drawing up such contract arrangements on terms that he sees fit, I believe that it would muddy the waters and create a lack of clarity in relation to what he can or cannot pay for. The amendment should also be seen both in the context of the overall Bill and of the little but specific phrase ''under this section'', which links both parts of the clause. Any discussion of this matter needs to be seen in the context of the clause as a whole. I appreciate, as the hon. Gentleman implied, that the power is wide ranging, but we believe it to be appropriate. 
Payment in respect of passenger franchises will form a large proportion of the payments made under the clause, and when financial assistance is given to a franchise holder, subsection (5) makes it clear that it can be given only in accordance with the franchise agreement. That locks down part of the supposedly wide-ranging powers in the subsection. All franchise agreements to which the Secretary of State will be party must appear on a public register, to comply with section 73 of the Railways Act 1993. For that chunk of the payments, we have provided proper transparency showing what the Secretary of State is buying from franchisees and on what terms. 
Other payments that will be made under the clause will include payments of grant to Network Rail. As everyone knows, those will be set by the Office of Rail Regulation. Other payments will be made to third parties; those payments are designed to improve or develop the railway. Many of the disbursements provided for in the Bill will be routine payments via franchise agreements and via the ORR to Network Rail. Subsection (3) relates to the third category—payments to third parties that are designed to improve or develop the railway. 
In that context, to get the best terms and conditions from any third party, the Government need flexibility on the terms on which they are permitted to pay, invest or guarantee. The amendment would remove that  flexibility. The amendment would not have an impact on what the Government pay in terms of the ORR, Network Rail through the ORR or through franchise agreements, but it would have an impact on that third element—payments and disbursements to third parties. We need to retain flexibility in that area, because it could cover an array of payments and agreements. The amendment would remove that level of clarity and flexibility from the Bill, which is why I believe it to be inappropriate. 
All the usual reporting arrangements through documents such as the Department's annual report will ensure that the Secretary of State remains fully accountable to Parliament for the spending and investment decisions that he makes. I hope that that is clear. 
Clauses 9 and 11 give Scottish Ministers and the National Assembly for Wales authority to make funding and grants available to freight operators for activities within their respective devolved areas. A key principle of devolution is that it allows the devolved Administrations to adopt different funding and investment policies from each other and the rest of the UK, and from those that apply in the non-devolved areas. Amendment No. 53 would place an obligation on the Secretary of State to apply what is in effect a fairness of distribution test for funds under his control when looking at projects and schemes that are proposed and paid for by the devolved Administrations and that cuts right across the devolution spirit that we are trying to secure in the Bill. As those Administrations may well adopt different investment policies and have different levels of funding available to them for freight schemes, it would be inappropriate to place the Secretary of State under such an obligation. 
I shall say this only once, but because of an error on the part of officials, my notes refer to a hope that my ''hon. Friend'' will withdraw the amendment. Given that it is our first sitting in the new year, let us leave the hon. Member for Spelthorne (Mr. Wilshire) as an hon. Friend just this once. In that context, I ask my hon. Friend to seek leave to withdraw the amendment.

Greg Knight: May I echo the Minister's remarks and wish every member of the Committee a happy new year? I hope that we will all remain in our places, but as viewed through a mirror: in other words, on opposite sides of the Room.
Perhaps almost uniquely in our proceedings, I found that I agreed with pretty much everything that the Minister had to say about the amendments. I hope that in the light of what has been said my hon. Friend the Member for Spelthorne will withdraw the amendment.

David Wilshire: Well, I am being got at from all sides this morning. What a new year. The Minister referred to me as an hon. Friend; I do not want to ruin his reputation further by thanking him for his Christmas card. Perhaps that tells us something. I have got him into trouble.
On amendment No. 52, I think that I know when I am beaten. As for amendment No. 53, I find it interesting that the Minister argued that he did not  want to see the Government being made to act fairly. He put forward a good argument for why it should be necessary for the Government to be unfair. 
One of my new year's resolutions was to listen carefully to the Minister, because later this year, when Conservative Members are on the Government Benches and it is argued that we are being unfair, I shall simply quote the former Member for Harrow, East, as the Minister will then be. I shall catalogue his arguments against me so that when we hear them later this year we will be able to say that in January the Government of the day said that it was alright to be unfair and so what is sauce for the goose is sauce for the gander. I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
Clause 6 ordered to stand part of the Bill.

Clause 7 - Notification of assistance from Secretary of State for freight services

Question proposed, That the clause stand part of the Bill.

Greg Knight: We welcome this clause because we share the widely held view that more could and should be done to encourage the provision of rail freight services and to encourage companies to send by rail rather than road heavy goods that are going long distances. We are pleased to see the clause in the Bill and we will not divide the Committee on it.

John Thurso: I add my happy new year felicitations to the Committee.
The Liberal Democrats also feel that more should and could be done to assist freight on the railways. We are happy to see the clause in the Bill and will not seek to divide the Committee either.

Tony McNulty: A happy new year was fine, but the felicitations were a touch otiose. However, that is by the by.
Clause 7, together with clauses 9 and 11, seeks to encourage the co-ordination of schemes for providing financial support aimed at securing the provision, improvement or development of rail freight. Given that rail freight activities clearly may cross borders between England, Wales and Scotland, there must be an overarching dimension that goes beyond what we seek to do in respect of devolution. There is broad consensus throughout the Committee that more can and should be done on freight. In terms of volume, freight is in a healthy position compared with where it was 10 or 15 years ago, but I fully accept that more can be done. We need this overarching clause along with  clauses 9 and 11 to make that a reality in the new post-SRA rail industry. With that, I commend clause 7 to the Committee. 
Question put and agreed to. 
Clause 7 ordered to stand part of the Bill.

Clause 8 - Franchising and financial assistance in relation to Scotland

John Thurso: I beg to move amendment No. 12, in page 7, line 27, at end insert
 '(1A) The Secretary of State may not enter into a franchise agreement relating to services that are or include Scotland-only services unless the Scottish Ministers join with him as party to that agreement.'.

David Amess: With this it will be convenient to discuss amendment No. 44, in page 7, line 43, leave out 'partly' and insert 'mainly'.

John Thurso: Amendment No. 12 is designed to test the commitment relating to devolution of power to Scottish Ministers. The Bill devolves to Scottish Ministers considerable powers relating to the railways that were formerly with the SRA. That is wholly correct. In fact, it has been said that this is one of the single largest devolutions of power since the Scotland Act 1998 took effect. That is appropriate and significant, and I commend the Government for doing it. As always, however, the devil is in the detail, and the Bill is a little unclear on the exact relationship between the Secretary of State exercising the functions formerly held by the SRA and the responsibilities of Scottish Ministers in the exercise of those powers in respect of Scotland.
Originally, I considered seeking to place an amendment somewhere in schedule 1, which seemed a more appropriate place, but I could not find in its various paragraphs anywhere where such an amendment might conveniently sit, so I chose clause 8. 
The amendment states: 
 ''The Secretary of State may not enter into a franchise agreement relating to services that are or include Scotland-only services''— 
I stress that the amendment relates purely to Scotland-only services; there is no attempt to relate it to cross-border services— 
''unless the Scottish Ministers join with him as party to that agreement.'' 
As we are devolving power to Scottish Ministers to take decisions, which I applaud, it seems wrong to allow a situation, even though it may not come about, in which Scottish Ministers may not wish to be party to a franchise agreement but can be overridden by the Secretary of State. 
Would the Under-Secretary be kind enough to confirm what the Government's attitude will be towards the operation of responsibilities? If sufficient reassurance is given at this juncture, I shall not feel it necessary to press the amendment, but if she cannot give such an assurance, it may be necessary to test the opinion of the Committee. 
I can offer the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) the reassurance that I think he needs. The Bill enables only Scottish Ministers to designate the Scotland-only services for franchising under section 23 of the 1993 Act as amended by the Bill. The Secretary of State for Transport in the UK Government may not do so. The Secretary of State is the appropriate designating authority in relation to all other services, although both the Secretary of State and Scottish Ministers can designate, as I think the hon. Gentleman understands, cross-border services after consultation with one another. Our intention is to ensure that Scottish Ministers become solely responsible for Scottish franchises, which are those that provide the Scotland-only services and relevant cross-border services, which we discussed previously, and that the Secretary of State and the UK Government are responsible for other franchises. There is a slight difference in respect of the Wales-only services, which we may deal with later. 
As the hon. Gentleman said, a fundamental principle of the Bill is to exercise devolution and to transfer functions in a way that many members of the Committee and people across Scotland see as very forward looking. In the light of my reassurances, I hope that he will ask leave to withdraw the amendment.

Greg Knight: Before we proceed to a vote, or otherwise, will the Minister say whether she thinks that amendment No. 44 is a desirable minor modification of the Bill?

Anne McGuire: My inclination is that the amendment is unnecessary. It would limit the circumstances of Scottish Ministers where they might want to give resources to create services to provide a facility in Scotland. In a recent Scottish Committee there was a wide-ranging debate on whether it was appropriate in some instances for Scottish Ministers to seek to support services in other parts of the United Kingdom where those services have a direct impact in Scotland. It is a valuable option for Scottish Ministers to be able to use such facilities.
The right hon. Gentleman's amendment would curtail the responsibilities, rights and the decision-making authority of Scottish Ministers in making an assessment, whether or not there are some services outside the Scottish geographical area that would have a direct impact to the benefit of Scotland. The amendment would also limit Scottish Ministers' responsibilities and decision-making autonomy in supporting services that will have a direct impact inside Scotland's geographical boundaries.

John Thurso: In the light of the Minister's reassurance, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Clause 8 ordered to stand part of the Bill.

Clause 9 - Notification of assistance from Scottish Ministers for freight services

Question proposed, That the clause stand part of the Bill.

Greg Knight: Clause 9 is similar in effect to clause 7, which we supported. We therefore do not wish to make any adverse comment on the clause, which I am happy should remain part of the Bill. However, I place on record that silence from the Opposition Benches in future clause stand part debates should not necessarily be taken to mean unqualified support.
Question put and agreed to. 
Clause 9 ordered to stand part of the Bill.

Clause 10 - Franchising and financial assistance in relation to wales

David Amess: Unfortunately, the hon. Member who tabled amendments Nos. 70, 71, 72 and 75 is not here, so they cannot be moved.

Greg Knight: I beg to move amendment No. 45, in page 9, line 34 leave out 'partly' and insert 'mainly'.
The amendment would do exactly what amendment No. 44 to clause 8 sought to do. I am still reflecting on the Minister's eloquence in explaining why the amendment should not be made and I am glad that she put it on the record. On reflection, I agree with what she said, and I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn. 
The Chairman: The hon. Member who tabled amendment No. 73 is not in his place, so it cannot be moved. 
Clause 10 ordered to stand part of the Bill.

Clause 11 - Notification of assistance from Welsh Assembly for freight services

Question proposed, That the clause stand part of the Bill.

Greg Knight: I rise only to place on record that I find it astonishing that an hon. Member who represents a seat in Wales, who sought a place on this Committee presumably to speak for Wales, does not have the decency to turn up.

Tony McNulty: I heartily endorse all that the right hon. Gentleman said, without reservation.

David Amess: Perhaps I am being too charitable, but I hope that nothing untoward has happened to the hon. Member for Ceredigion (Mr. Thomas).
Question put and agreed to. 
Clause 11 ordered to stand part of the Bill.

Clause 12 - Transfer schemes at end of franchising agreements

David Amess: Again, the hon. Member for Ceredigion is not present, so his amendment cannot be moved.
Clause 12 ordered to stand part of the Bill.

Clause 13 - Railway functions of Passenger Transport Executives

Tom Harris: I beg to move amendment No. 88, in page 12, line 6, leave out
'for an area in England have' 
and insert 'has'.

David Amess: With this it will be convenient to discuss the following amendments: No. 89, in page 12, line 10, leave out 'Secretary of State' and insert 'appropriate national authority'.
No. 90, in page 12, line 17, leave out 'in England'. 
No. 91, in page 12, line 18, leave out 'Secretary of State' and insert 'appropriate national authority'. 
No. 92, in page 12, line 20, leave out 'Secretary of State' and insert 'appropriate national authority'. 
No. 93, in page 12, line 24, leave out 'Secretary of State' and insert 'appropriate national authority'. 
No. 94, in page 12, line 27, leave out 'in England'. 
No. 95, in page 12, line 34, leave out 'in England'. 
No. 96, in page 12, line 41, leave out 'Secretary of State' and insert 'appropriate national authority'. 
No. 97, in page 12, line 42, leave out 'Secretary of State' and insert 'appropriate national authority'. 
No. 98, in page 13, line 2, leave out 'in England'. 
No. 99, in page 13, line 3, leave out 'Secretary of State' and insert 'appropriate national authority'. 
No. 100, in page 13, line 6, leave out 'Secretary of State' and insert 'appropriate national authority'. 
No. 101, in page 13, line 7, leave out 'in England'. 
No. 102, in page 13, line 26, at end add— 
 '(10) In this section ''the appropriate national authority'' means— 
(a) in relation to a franchise agreement to which the Secretary of State is a party, the Secretary of State; and 
(b) in relation to a franchise agreement to which the Scottish Ministers are a party, the Scottish Ministers.'. 
No. 103, in clause 59, page 58, line 10, leave out '(a) section 13;'.

Tom Harris: I am delighted to have this opportunity to speak to the amendments, which stand in my name and that of my hon. Friend the Member for Cumbernauld and Kilsyth (Rosemary McKenna).
The amendments are aimed primarily at ensuring a level legislative playing field for all Britain's passenger transport executives, including the Strathclyde passenger transport executive, of which I am a former employee. I was the chief public relations and marketing officer for three years until the 2001 general election, but as I am not paid as a consultant it does not appear in the Register of Members' Interests. 
The amendments address my concern and that of others that if the Bill is unamended it will create a gap in the legislation in Scotland that will erode the SPTE's ability to intervene effectively in the specification and management of the Strathclyde network. As I said on Second Reading, the SPTE performs an invaluable role in the provision of public transport in my constituency and in those of many other west of Scotland MPs. More than a quarter of all fare-paying journeys in Strathclyde are made by rail and rail use in the area is higher than anywhere else in the UK apart from London. 
That state of affairs did not come about by accident; it is the result of conscious political choice at regional level and more than 30 years' investment in the Strathclyde rail network by local taxpayers and passengers. The process has continued since privatisation; since 1997, Strathclyde passenger transport has invested around £50 million of discretionary local funding in the local rail network. Recent research by Ernst and Young and LEK Partnership showed that more than half of the growth in patronage and revenue on the Strathclyde rail network during the 11 years to 2001 was directly attributable to initiatives undertaken by SPT. 
The Scottish Minister for Transport, Nicol Stephen MSP, said: 
 ''I still expect SPT to have a direct role in the management and development of rail services in the west of Scotland.''—[Scottish Parliament Official Report, 16 June 2004; c. 9099.] 
That is consistent with what the Secretary of State for Transport said. He told the House of Commons that 
''local transport decisions are best taken by people who know what is needed locally.''—[Official Report, 15 July 2004; Vol. 423, c. 1548.]. 
The problem for planners in the west of Scotland is that they are being asked to take much of that on trust. Much of the proposed Scottish legislation will be enacted not through primary legislation, but through statutory instruments in the Scottish Parliament and so without any debate on the issues. 
It is now clear that the Scottish Parliament's legislative competence in these areas will simply amount to the transferring of functions that are already defined in Acts of this Parliament. The Scottish Parliament will be unable to vary the fundamental railways legislation, which will remain a reserved matter. This goes back to some comments made by the hon. Member for Caithness, Sutherland and Easter Ross when he talked about powers being devolved up to the Scottish Ministers. Responsibility  is being devolved, but power remains with this Parliament. I agree with that but these amendments would make the transition in Scotland smoother. 
When so much remains uncertain, or at least undefined and seeking political clarification at Holyrood, it is important that this Parliament should not foreclose legislative options by specifically striking the SPTE out of the statutory PTE rail provisions that will continue to be available south of the border. The Bill, as drafted, removes most PTE powers under the Railways Act 1993, but in their place—we have had reassurances on this from the Minister—provides specific powers for the Secretary of State for Transport to re-engage English PTEs in the franchising process. 
The purpose of my amendments is to make the same powers available to Scottish Ministers, so creating a level playing field north and south of the border. As the SPTE has the most extensive railway responsibilities of all of the seven PTEs in Great Britain it is important that the drafting of clause 13 should not leave an unintended gap in the legislative chain which might prejudice the proper delivery of integrated transport in the west of Scotland or fetter the future discretion of either the Westminster or Scottish Parliaments in this area. 
If this legislation is passed unamended there is a real risk that the SPTE will fall between two stools. This House is proposing to take away its existing rail powers—its right to be a co-signatory to the ScotRail franchise, for example—but the Scottish Parliament would not have the ability to put anything else in its place, either along the lines of what is proposed for the English PTEs, or on a different basis. As these powers are mainly permissive, they would not commit Scottish Ministers to a specific course of action. The amendments would, however, help to avoid a situation where Scottish Ministers were statutorily debarred from involving the SPTE in rail franchising. 
It is important that we should not foreclose legislative options by specifically striking the SPTE out of the statutory rail provisions that will continue to be available to PTEs south of the border. It is necessary to make these amendments as part of the UK Railways Bill because the Scottish Parliament does not have legislative competence to make a similar provision in a Scottish Act. These amendments are mainly to clause 13, but there is an important consequential amendment to clause 59. I look forward to hearing the Minister's response to the points that I have raised.

Rosemary McKenna: I join others in wishing everyone a guid new year. I rise to support the amendments. I was briefly a member of the SPTE in my local government days in the mid-1990s. I want to record my appreciation and that of my constituents for the work carried out by the SPTE throughout the area, but particularly in my constituency. We have had tremendous additional provision such as a station at Greenfaulds and massively increased provisions at Croy station with additional car parking soon, we hope. That all links through to the rest of the UK and beyond. I consider the rail network to be a jewel in the crown. In order to ensure that that work continues, I want to support my  hon. Friend the Member for Glasgow, Cathcart (Mr. Harris). I hope that my hon. Friend the Minister will respond positively.

Anne McGuire: Like most people who have a base in the west of Scotland, I should also admit that I have some experience of the SPTE. Indeed at one point, as a member of the old Strathclyde regional transport committee, I was responsible for part of the management of the SPTE. That was many years ago—I was practically a child at the time—and I do not remember much about it, but I thought that I would place that on the record.
Having said that, I recognise the picture painted by my hon. Friends. The SPTE was in the vanguard of integrated transport in its time, and much of that had to do with the approach taken by the then Strathclyde regional council, which was a strategic authority for the west of Scotland. It went out of business in 1995 as a result of the then Government's reform of local government in Scotland. 
As my hon. Friends made clear, the only PTE that does not fall under the provisions of clause 13 as drafted is Strathclyde, but as the White Paper ''The Future of Rail'' made clear, the Government intend to devolve greater responsibility for rail in Scotland to the Scottish Executive. That proposal has widespread support in the Committee and the House. In parallel, a new framework is being created in England and Wales. Those arrangements include the creation of statutory regional transport partnerships throughout Scotland, including the partnership for the west of Scotland. Scottish Ministers have made it clear that the SPTE's non-rail powers will be transferred to the new west of Scotland RTP, and the relevant rail powers will be transferred to Scottish Ministers. The outcome will be that the SPTE will not have any powers or functions; these will have been transferred elsewhere.

Tom Harris: I understand what my hon. Friend is detailing, but does she agree that there is an added danger that because the Scottish transport Bill has yet to make its way through the Scottish Parliament, there may well be a legislative gap between the passing of this Bill into law and the introduction of the Scottish transport Bill? That would leave the SPTE in a political no-man's-land for at least a time.

Anne McGuire: My inclination is to say that that will not be the case, but if, before I finish speaking, I happen to have a bit of inspiration that tells me that there will be a gap, I will obviously confirm that to the Committee. It does seem a bit superfluous and confusing at the moment to amend clause 13 in the way—[Interruption.] There will be no gap between the two Bills—inspiration has just hit me—because ScotRail has just signed off the situation in Scotland.
My role this morning in Committee is to be a reassuring Minister, and I hope that I can reassure hon. Members that the significant role that rail has in the west of Scotland will not be diluted. My hon. Friend the Member for Cumbernauld and Kilsyth (Rosemary McKenna), representing a large new town,  is interested in the extension of transport infrastructure, particularly rail infrastructure, but Scottish Ministers have made it clear that the west of Scotland RTP will have a role in the development, management and monitoring of the franchise in the west of Scotland. 
I can also reassure my hon. Friend the Member for Glasgow, Cathcart (Mr. Harris). The Transport (Scotland) Bill includes provisions that would allow Scottish Ministers, if they so wished, to transfer or share their transport functions with the new transport partnerships. Therefore, if they wish to involve the SPTE in rail franchising, that is within the remit of the new transport Bill. It does not statutorily debar Scottish Ministers from involving other parties in that rail franchise. I hope that that gives my hon. Friends enough assurance to allow the amendment to be withdrawn.

Tom Harris: I am grateful for my hon. Friend's comments. I know that she, like all MPs in Scotland, regards the matters that we are discussing as very important to our constituents' quality of life. With her customary diligence and courtesy, she has gone over some of the points that I raised, but I disagree with her in one respect. I do not believe that the amendments are at all—I cannot remember the word that was used.

Anne McGuire: Superfluous.

Tom Harris: Yes, superfluous. I believe that the amendments are finely crafted and honed, and would have added a great deal to the Bill. However, on the basis of the reassurances given by my hon. Friend, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Graham Stringer: I beg to move amendment No. 77, in page 12, line 7, at end insert
'(aa) entering into a franchise agreement in respect of such services following the receipt of tenders in response to such an invitation, or'.

Michael Martin: With this it will be convenient to discuss the following amendments: No. 78, in page 12, line 9, at end insert
(c) requiring or agreeing to significant changes to such services following the entering into of a franchise agreement in respect of such services.'. 
No. 79, in page 12, line 10, at end insert 
'in relation to the proposed specifications for or changes to such services, which notice may include the proposed levels of quality, specifications relating to the operation of stations in the Executive's area and any proposed requirements with respect to fares, or any changes to any of them.'.

Graham Stringer: The amendment is relatively straightforward, and would amend what I am sure is an oversight in the Bill. Although the Bill allows the Secretary of State to consult passenger transport executives, it does not place on him a statutory obligation to re-consult when there have been significant changes in the specifications or the  franchise agreement. The purpose of tabling amendments Nos. 77 and 78 was to include such an obligation. The purpose of tabling amendment No. 79 was to define the remit of further consultation in the event of significant changes occurring.

David Clelland: I wish to support the comments made by my hon. Friend. I am sure that this must have been an oversight by the draftsmen because, if it makes sense for the Secretary of State to consult the PTEs initially, it must also make sense for him to consult them if changes are made subsequent to those consultations. I shall be interested to hear the Minister's reply.

Tony McNulty: I am grateful to my hon. Friends for explaining the reasoning behind the amendments so succinctly—namely, that PTEs should be consulted after the invitation to tender but before entering into a resulting franchise agreement, and on any significant changes to the specifications during the franchise, and that PTEs should be consulted on the level of service and the quality of services and stations and fares within their areas. I agree with the aims behind my hon. Friends' amendments, but I do not believe that the amendments are necessary to give the PTEs the reassurance that they seek, nor do I believe that the legislation is the best place for that level of detail.
From a range of meetings that I have had, I am aware that PTEs are concerned that, without the amendments, it would be possible for the Government to consult them on one specification and then, either after issuing the invitation to tender or during the franchise, make changes to the specifications that could be detrimental to the PTEs without further consultation. I accept that that is a concern. However, that is not the Government's purpose. 
In practice, the procurement rules restrict the scope for making significant changes to the specification after the invitation to tender stage and before letting the franchise. The Government would want to avoid making significant changes to franchise specifications after the invitation to tender stage, as that could be unfair to other potential tenderers and might make it more difficult to obtain the best value for money bid for the franchise. Given that it is unlikely that the Government would make significant changes to franchise specifications after issuing the invitation to tender, it seems over-bureaucratic to create a system in which the PTEs must be statutorily consulted twice on every franchise specification. In most cases, that would be two consultations on exactly the same thing. 
The Government would obviously consult the PTEs on significant changes to the franchise specifications in their area if such changes did occur, both during the procurement process and during the running of the franchise. However, we believe that that level of detail is better suited to guidance rather than being set out in statute, particularly as amendment No. 78 refers to an ambiguous concept of ''significant change''. An ambiguous concept such as that could be much more effectively defined in guidance rather than in legislation, and in drawing up the guidance we could agree with the PTEs more precisely the circumstances  in which they should be consulted. We therefore intend to define the exact detail of consultation arrangements for inclusion in the guidance that we are drawing up in consultation with the Passenger Transport Executives Group. That guidance will be issued next year. As I said on Second Reading, and at least once in Committee, as and when—sooner rather than later, and hopefully during the Committee stage—I am in a position to give at least the high-level framework of what is likely to be in the consultation guidance, I will do so. 
Under clause 13, the PTEs are to be consulted on more franchises than they currently co-sign and co-specify. They will naturally be more involved with franchises that include more services in their area than those that do not. It is appropriate for the guidance to reflect that with a flexible approach to PTE involvement with franchises, both at the letting stage and during mid-franchise management, rather than creating an inflexible and over-bureaucratic statutory system. 
On amendment No. 79, I again believe that guidance rather than legislation is the more appropriate place for such detail. The elements that my hon. Friends identify—service specification, fare levels and quality of service at stations—are precisely the type of issues that we plan to consult PTEs on. We will include the details of that in the guidance that we are developing in consultation with the Passenger Transport Executives Group, which will be issued next year. 
Amendment No. 79 goes further than amendment No. 78 in suggesting that PTEs should be consulted on every change to the franchise specification, no matter how small. That goes much further than the need to consult on significant changes, and would create a system whereby the Secretary of State could spend all of his time consulting PTEs. We intend to set out in guidance how and when the Secretary of State will consult PTEs on significant changes to the franchise during its operations. However, I do not think that a process in which the Secretary of State must consult PTEs on every change is practicable or desirable. 
I know that a lot will be left to guidance rather than put in the Bill. My fellow Minister was not seeking to suggest that I was anything less than accommodating when she said that she would be the reassuring and accommodating Minister on the Committee; I also seek to be accommodating.

David Wilshire: Except when I suggest something.

Tony McNulty: Yes, I fully accept that with pride. Let us wait to see the high-level elements of the guidance on consultation that I shall try to bring before the Committee as soon as possible. Hopefully, that will allay fears and concerns about the PTEs' role on guidance. If not, hon. Members will have an opportunity to return to the subject during the parliamentary process. In the light of my assurances about guidance rather than the Bill being the right and proper place for certain details, I urge my hon. Friend to withdraw the amendment.

Graham Stringer: I thank my hon. Friend for that detailed, thorough and intellectually rigorous proclamation of the Government's position.

Gillian Merron: As always.

Graham Stringer: Indeed it is, as my hon. Friend the Whip says. I accept those assurances and will withdraw my three amendments. However, in doing so I shall make one point that may become relevant in the further debate. I am happy to accept my hon. Friend the Minister's assurances that he will behave reasonably and that such matters can be dealt with in guidance, but unfortunately we must consider that some time in the distant future, other less reasonable Ministers and Secretaries of State—possibly even from other political parties—may not always behave as reasonably. It is worth considering here and elsewhere in the Bill whether it is better to put protection for the passenger transport executives and other interested parties in the Bill, rather than to rely on the common sense and decent behaviour of Ministers. I have no doubt that Ministers in this Government will behave reasonably, but that has not always been and will not necessarily always be the case.

David Clelland: I support what my hon. Friend said and his intention to withdraw the amendment, but I would like to draw attention to some of the Minister's comments. I do not know how rigorously intellectual his response was, but he said that the Government were unlikely to do this and that the Secretary of State did not intend to do so. Yet he described our use of the word ''significant'' as overly ambiguous rather than unduly specific. That seems a little bit like the frying pan calling the kettle black. However, as my hon. Friend has said, we wait to see what further information the Government put forward.

Graham Stringer: I beg to ask leave to withdraw the amendment
Amendment, by leave, withdrawn.

Graham Stringer: I beg to move amendment No. 80, in clause 13, page 12, line 10, at end insert—
 '(1A) An Executive that has been consulted under paragraphs (a) or (b) of subsection (1) may before the expiry of a period of 60 days following the date on which that consultation began, make a statement to the Secretary of State specifying— 
(a) the services in which that Executive has an interest which the Passenger Transport Authority for the area in question considers it appropriate to secure to meet any public transport requirements within that area; 
(b) any minimum level of quality to which any services so specified are to be provided; 
(c) any requirements with respect to the fares to be charged to persons using any services so specified; and 
(d) any minimum level of quality with respect to the operation of any station within the area in question which may be required by any such franchise agreement. 
 (1B) Where a Passenger Transport Executive for an area in England submits a statement under subsection (1A), the Secretary of State shall ensure that the services, and any minimum levels of quality or requirements with respect to fares, specified in that statement are provided for in any franchise agreement into which he may enter in respect of the services in which the Executive has an interest.
 (1C) The Secretary of State need not do anything under subsection (1B) if, or to the extent that it would— 
(a) have an adverse effect on the provision of services for the carriage of passengers or goods by railway (whether inside or outside the area in question); or 
(b) increase the amount of any expenditure of the Secretary of State in respect of railways under agreements or any other arrangements entered into with any franchise operator, any franchisee, or any servant, agent or independent contractor of a franchise operator or franchisee, and the Secretary of State considers that the Executive would not fund that increased expenditure.'.

David Amess: With this it will be convenient to discuss the following amendments: No. 81, in page 12, line 11, leave out ''subsection (1)'' and insert
'subsections (1), (1A) and (1B)'. 
No. 82, in page 12, line 16, at end insert— 
 '(2A) Where a Passenger Transport Executive for an area in England submits a statement under subsection (1A), the Executive shall be a party to any franchise agreement in respect of any services specified in the statement.'. 
No. 84, in page 13, line 12, at end insert— 
 '(8A) If the Secretary of State considers it desirable to do so in relation to any franchise agreement in respect of services for the carriage of passengers by railway— 
(a) having regard to the proportion of those services that are proposed to be provided within one or more passenger transport areas, or 
(b) for the purpose of securing expeditiously that the agreement is entered into, 
 he may give a direction to the Passenger Transport Executive, or Executives, for the area, or areas, concerned providing that any one or more of subsections (1A), (1B) or (2A), or any part of any one of those subsections, shall not have effect with respect to that franchise agreement.'.

Graham Stringer: The amendments go to the heart of both the Government's intentions and the concerns that passenger transport authorities and passenger transport executives have expressed about clauses 13 and 14. I say now what I probably should have said at the start of the debate on the previous clauses: I do not think that this is a declarable interest, but for 13 years I was a member of the Greater Manchester passenger transport authority.
The Government have stated clearly that they want to devolve power to the PTAs and PTEs, which, as they know their areas better than the Government ever can, can make reasonable decisions about whether to invest in rail, light rail, buses or other forms of public transport. I agree with those aims. My concern is that the proposals remove the rights of the PTEs to specify what should go to franchisers. That is the subject of amendment No. 80. The right of the PTEs to be a signatory to the franchises has also been removed. Is that an improvement? Is it devolving power? Is it streamlining the process, or is it likely to make it less efficient and more centralised? It is probably worth taking a minute to go through the current process and see how it will change. We then can examine, in the light of amendments Nos. 80 and 81, whether the Government's stated aim has been achieved. 
The Government said on Second Reading and in various statements that there are two reasons for the change. First, the PTEs have an ability to write their  own cheques, incurring extra expenditure to the public purse, without the responsibility of raising the money. Secondly, the current process whereby the PTEs sign the franchises is complicated and cumbersome and the proposals will streamline things. Currently, the Secretary of State indicates that there will be a franchise and the Strategic Rail Authority will go out to tender. It will consult the PTE on how it would like to specify the services. I will come back to what is specified in a little while. The lowest or most appropriate tender—price is not the only consideration—is then accepted. That specification then becomes part of the contract. 
The proposal is that the Secretary of State states his intention that there will be a franchise—of course, the Strategic Rail Authority will be abolished—goes through the franchising process and consults the PTE, but does not put its consultations and specifications into the contract. That will have a number of consequences that do not streamline the process, because for any change that is to take place, the PTE has to negotiate with the franchisee via the Secretary of State—in reality, Department for Transport officials. That is likely to be a much more difficult process than negotiating directly as a partner. 
To justify what they are doing, the Government must come up with real evidence that a PTE has at some stage used its position in specifying services to increase public expenditure for which it had no responsibility. Having consulted all the PTEs, I am assured that although there have been discussions about changing specifications, the SRA has been tough and no such extra expenditure has taken place. I should be interested in the Minister's evidence on that. 
I think that it has been said that the Strathclyde PTE delayed franchising to give itself an edge and a corner in negotiations. However, I am told that, although it negotiated on specifications, that franchise was not delayed. It is important that the ability to specify what is in the contract remains with the PTE. I have come across no evidence that PTEs are being problematic. 
If we consider the specifications and what rights are given when a PTE signs a franchise, we can see how important the matter is. With your permission, Mr. Amess, I shall read out some of the rights that PTEs have when they sign franchises. PTEs have 
 ''The right to require current frequencies, capacities and rolling stock quality within PTE areas to be maintained, subject to PTEs themselves meeting any additional resulting costs and subject to the SRA's right at any time to override these requirements following consultation . . . The right to information on passenger demand and the right to be consulted on service changes aimed at meeting this demand . . . The right to information on local rail fares and to include fares within the fares regulation regime where these would not otherwise be reasonably constrained . . . The right to approve increases in local fares above regulated levels where such increases are to be used to fund service improvements . . . The right to require participation in multi-modal ticketing schemes, integrated transport schemes and concessionary travel arrangements . . . The right to receive performance information in respect of punctuality, cancellations, provision of capacity and the results of service quality audits . . . The right to be consulted on such matters as proposals to reduce the staffing of local stations and improvements to disabled access at stations . . . The right to be notified and consulted on temporary timetable changes within PTE areas . . . The right to impose requirements in respect of timetable formats and to require co-operation with PTE promotion of local services.'' 
I am talking about PTEs specifying services and having those rights within the franchise agreements. Let us imagine that the Secretary of State has put something out to tender. The franchise is with FirstGroup to run a train service, and there are some side agreements. The PTE asks for information on passenger demand because it is concerned about the level of services, which is one of the rights that it currently has, and FirstGroup says, ''We think that this is commercially sensitive, get lost!'' In that situation, what can the PTE do to enhance the local transport system? What powers does it have to rectify that situation? The answer is that it has very few powers. 
In an ideal world, FirstGroup or Arriva or whichever other company will behave reasonably, as I am sure my hon. Friend the Minister does on all occasions. However, we have evidence of similar situations in which those companies run buses, and when the PTE has asked them for information about passenger demand or timetables they have said no or been dilatory. FirstGroup, which operates buses in my constituency, is not a model company, and does not provide that information, which makes it more difficult for the PTE to carry out its statutory obligations to oversee transport in its area. 
There is a real conflict between the Government's intentions and what will actually happen on the ground. That is why the four amendments have been tabled: to establish the status quo, which works. We have found no evidence that the existing system is causing problems, but there is evidence from the bus industry that similar systems to those proposed by the Minister would be unlikely to provide a better system. 
I realise that I have not dealt as thoroughly with amendment No. 84, which would broadly preserve the current statutory provision under which the Secretary of State can, in appropriate cases, disapply the SRA's obligation on the PTE's right under section 34 of the 1993 Act. That is a sensible proposal with which to round off the amendments. 
I look forward with interest to hearing the Minister's replies to those points. I certainly agree with the general direction of the Bill. It is right to take responsibility for how public money is spent, and the intention to devolve is right, but the practical implications of the changes to the rights and responsibilities of PTEs are wrong, and they will not lead to decentralisation, devolution and a better public transport system.

David Clelland: The amendments rest on the belief that the proposals in the Bill are based on a misconception and an incorrect interpretation of the current law. The White Paper said that PTEs
''are not directly exposed to the consequences of their decisions on fares and service levels.'' 
We would argue that that is manifestly wrong. PTEs currently have no right—statutory or contractual—for increased franchise payments resulting from PTE requirements to be reimbursed through SRA grant or  through any other funding channel. PTEs have no expectation of receiving a blank cheque for local rail services. There is also no basis for removing existing PTE specification rights on the grounds that 
''the more services PTEs specify, the more funding they receive'' 
as ''The Future of Rail'' White Paper also incorrectly states. 
Passenger transport executives have a continuing statutory duty to secure the public transport services necessary to meet the public transport requirement in their areas. We argue that PTEs are better placed than civil servants and, with respect, Ministers in London to judge rail services and needs in their own areas. We are asked to trust Ministers and the Secretary of State to do the right thing by our localities. We can trust that anything that the current Ministers and Secretary of State do will be in the interests of our areas. However, this Secretary of State and these Ministers will not necessarily be there for ever, although we hope that they will, and there could be a change. We are told that we are coming up to a general election and who knows what might happen. The Prime Minister tells us that we should not be complacent and we are not. We might even conceivably have a change of Government, although that is unlikely. Therefore, we should develop legislation that incorporates the values of the party in power—the Labour party—and obliges future Governments to introduce new legislation to make changes, rather than leaving the door open for relationships to be changed because the Secretary of State changes. 
There is also the question of the Bill making it clear that the primary reason for the proposal is to avoid the additional costs and complexities, including bureaucratic complexities, that greater PTE involvement generates. Can the Minister give us the evidence of the additional costs and complexities that are referred to? As for bureaucratic complexities, we argue that the proposals would introduce more rather than less bureaucracy into the system, as each PTE would need to enter into separate arrangements with the Secretary of State. The Minister might also like to give us the evidence for the statement by the SRA that 30 to 40 per cent. of the time that train operating companies spend negotiating a franchise is with PTEs. 
My hon. Friend the Member for Manchester, Blackley (Mr. Stringer) listed the additional important rights that PTEs have under the current arrangements. Will the Minister assure us that those rights cannot be diminished as a result of the measures before us today? In summary, our argument is that if it ain't broke, don't fix it.

Tony McNulty: I am grateful to my hon. Friends the Members for Manchester, Blackley and for Tyne Bridge (Mr. Clelland) for again explaining the points that their amendments make, namely, that PTEs should continue to exercise their current powers to co-specify and to co-sign franchises for rail passenger services in their area. My hon. Friends will know that we are constantly thinking about and reflecting on this issue. The two ends of the continuum are the status  quo and what was set out in the White Paper. To remind the Committee, the White Paper clearly stated in July that we would end any ability of PTEs to co-sign franchises. Between July and the production of the Bill, we have reflected on that, and this proposal is the result of that reflection.
There are two main reasons why we are not willing to accept the amendments. First, they would not restore the status quo and the position of PTEs prior to the Bill, but extend the right of PTEs to co-specify and to co-sign franchises far beyond their current powers. I understand why people assume that there is a conundrum or contradiction at the heart of the Bill in terms of devolution, but the second and more significant reason not to accept the amendments is that the current right to co-specify and to co-sign means that PTEs are not directly exposed to the consequences of their decisions on fares and service levels. 
The amendments would mean that PTEs could co-specify and co-sign any franchise with a service within, to or from their area—far beyond their current right to co-sign franchises for services within their area—but I am sure that that was not the intention behind the amendment. 
At present, the English PTEs co-sign two franchises. If the amendment were accepted, they could co-sign up to 11. Given that one of the aims of the rail White Paper was to streamline the franchising process—the PTEs acknowledge that having three parties to a contract is more complicated than two—the amendment works against the spirit of the White Paper. If accepted, the amendment could mean that if the Secretary of State wished to make a change to a Virgin West Coast service between Penrith and Carlisle he would have to seek the signatures of Centro, Mersey Travel and Greater Manchester PTE. That clearly cannot be right. It is illogical that the Secretary of State, as strategic specifier and funder of the railways in England, should need to seek the approval of the PTEs to make changes to services some distance from their areas.

Graham Stringer: I am grateful to the Minister for making those points. Some of them will be dealt with in future amendments. While he is talking about what will happen in future franchises, will he assure the Committee that he intends to allow those PTEs who are currently signatories to franchise agreements in the north and the midlands to continue?

Tony McNulty: That is an entirely fair point and one that I will return to later. I am sure that my hon. Friend will remind me if I do not.
I am aware that amendment No. 84 seeks to mitigate the possible impact by giving the Secretary of State the right to direct PTEs not to be a co-specifier and co-signatory. That makes up only a small fraction of cases, where there is a desire to sign a franchise quickly. That amendment, too, would run counter to the White Paper by creating a new level of  bureaucracy. Just saying that things are not bureaucratic and complex does not make them any less bureaucratic and complex potentially. 
Amendment No. 84 also invites confrontation as there are sure to be differing opinions on what constitutes direct and proportionate services and about what co-specification and co-signing should be necessary. The system we propose would be more streamlined and would remove the confrontation and the need for repeated directions from the Secretary of State. There are already powers to direct in the Railways Act 1993, which have been used relatively sparingly. They may prevent wasteful disputes. 
My hon. Friend the Member for Manchester, Blackley is right to suggest that the Strathclyde example was not about money or blank cheques. However, it is a matter of record that, in 2003, when signing an interim franchise agreement for Arriva trains northern franchise, SPTE attempted to become a co-specifier and co-signatory to that franchise on the basis that one morning service a day went to Glasgow via Motherwell. That opened up full co-signatory and co-franchiser rights. The SRA was able to persuade SPTE to withdraw its claim but only a week before the franchise was due to be let. There was a danger of a delay in the franchise.

David Clelland: My hon. Friend has given one example and we are aware of that example. Perhaps he could give us one or two more to strengthen his case.

Tony McNulty: I have not finished yet.

David Clelland: I was hoping that he would come to that. If, as we argue, the Bill does not go far enough in involving PTEs in the process and if, as he argued, our amendments go too far, why cannot we simply have a compromise and leave well alone?

Tony McNulty: I am tempted to be facetious and say that I am not the man my hon. Friend is looking for if he wants a compromise. That is in the general sense. I will give another example both on this and later clauses. I emphasise again my starting position. The fundamental objection to the amendments is that they extend provisions. What we seek is far more explicit both in terms of franchises and in terms of all the parties that have any role in them. We want to get greater clarity and accountability into the process.
Although the possible extension of the PTE's right to co-specify and to co-sign franchises is a reason to reject the amendment, in the light of what my hon. Friend the Member for Manchester, Blackley said, I know that that is not its intention. I am aware that PTEs are concerned about the loss of the right automatically to co-specify and to co-sign franchises involving services within their areas. However, I reassure my hon. Friends that we have looked closely at the issue and we do not take these decisions lightly. I fully accept that PTEs play an important role in planning and reviewing local rail services and we are keen that that should continue. 
I repeat: the current procurement arrangements mean that PTEs are not fully exposed to the financial consequences of their decisions on fares and service  levels. The Government are committed to the devolution of responsibility but that can happen only when there is clear financial accountability so that decisions are taken on a level basis. At present, PTEs can, and sometimes do, use their right to co-sign to indulge in brinkmanship. In the past, that led to Opraf and the SRA buying off PTE demands rather than risk delaying franchises because PTEs refused to sign them. 
PTE demands are frequently not subjected to a business case or value-for-money test. Of course, PTEs do not want to change arrangements that pass on financial responsibility for their decisions to the taxpayer. The current system involves an expensive procurement process with protracted uncertainty for TOCs and there is duplication, extra bureaucracy and over-prescription in the monitoring arrangements. The PTEs' current ability to be a co-signatory of the franchise agreement lies at the heart of a lack of financial accountability and additional time and cost in the procurement process. 
As set out in ''The Future of Rail'' and ''The Future of Transport'' White Papers, the Department is keen to devolve greater decision making to local and regional bodies. The rail White Paper sets out much greater flexibility for PTEs to make choices about the balance of expenditure across modes of transport. I repeat: devolution can happen only where there is clear financial accountability. We cannot perpetuate a system that is opaque and leaves open options for brinkmanship. 
We are aware that PTEs are worried about the loss of their right to co-sign and although we are confident that the new system will enable the PTEs to continue to play an important role in their local rail services we have listened to their concerns. That is why we moved away from simply abolishing the right to co-sign and included the right for PTEs to co-sign at the invitation of the Secretary of State. 
At the risk of repeating what I said on another occasion, the exact circumstances in which the Secretary of State would invite PTEs to be co-signatories will be set out in the guidance that is being developed in consultation with the Passenger Transport Executives Group. However, given the overall objectives of the rail review to drive up performance and to get costs under control, it is clear that the Secretary of State should invite PTEs to co-sign only when it can be seen to contribute to those aims. 
Under the new system, PTEs will continue to have an important role in franchise specification in their area. In future, the PTEs will be consulted on the level of baseline specification and feed in to its development. When the baseline has been set, the PTEs will still be able to make cost-neutral changes to the specification for their area, to buy additional services or to reduce services and retain savings, as laid out in the rail White Paper. The process will be laid out in detail in the guidance issued to PTEs next year. 
In principle, it is likely that the Secretary of State will accept any proposed changes as long as they do not interfere with other rail services or add costs that  the PTEs are unwilling to meet. In effect, the co-specification right is retained but, in the new system, a quantity of national funding is available to spend in the PTE areas, rather than by the PTEs, as happens at present. We may need to make it more explicit in guidance or through some other channel how those co-specification powers will remain in place in the new world of the rail industry after the Bill is enacted. 
Given that the Secretary of State's role is as strategic specifier and funder of railways in England, it is correct that things should be that way round, without losing the ability of PTEs to do what they can at local level. The system outlined in the White Paper still gives PTEs the freedom to shape the make-up of services in their area. In that context, there must be a distinction between co-specification and co-signatory status. Perhaps we need to be more explicit in the guidance about what we mean by co-specification. Underpinning the thrust of where we are coming from in the White Paper and the Bill is the fact that of course local input and a local dimension are very important, but the balance needs to be redressed ever so slightly between financial accountability and the rights at local level. In that context, I ask my hon. Friend the Member for Manchester, Blackley to withdraw the amendment.

Greg Knight: It is not incumbent on me to repeat in detail arguments that the Committee has already heard. I shall merely place on record my agreement with those arguments. In so far as the Minister referred to the amendments as cumbersome and bureaucratic, we agree with that conclusion. My fear is that, if implemented, the amendments could lead to the decision-making process grinding to a halt, so I can see why he wants the Committee to resist them. That said, I hope that he will reflect on his comment of a few moments ago that he is not the man for compromise. We know that he likes to sustain a hard man image, but I hope that if an hon. Member from any party proposes at any stage of our proceedings on this or any other aspect of the Bill an idea that, on reflection, has merit, he will be prepared to reflect on the arguments advanced and to compromise.

Graham Stringer: I am disappointed but not surprised at the response of my hon. Friend the Minister to the amendments. I would not defend every word and detail of them, but this has been a useful debate about whether the measures in the Bill that refer to PTEs are really devolving power or centralising it.
The right hon. Member for East Yorkshire (Mr. Knight) and the Minister expressed worry that the amendments would lead to more bureaucracy. My answer is that the present system works. The intent behind the amendments is to return to the status quo. I certainly do not want to create anything more bureaucratic. I suspect that anyone who has tried to deal with commercial interests via officials at the Department for Transport, however willing and well motivated they may be, will know that the proposed new system is not an ideal way to go about influencing local transport plans. In fact, the more side agreements  there are, the more bureaucratic the system might be than the current one. The current system looks potentially cumbersome, but it works. It enables publicly elected bodies in the major metropolitan areas, certainly of England, to get train operators to sit around a table and discuss delivering decent public transport services for the area. 
My worry about what my hon. Friend the Minister has said is that there will now be no mechanism locally to ensure that those companies sit around the table. Some of them have a very poor record of dealing with the public. There is a mixed bag of train and bus operating companies in the new deregulated privatised world that we live in—some are good and some are bad—but there is no easy mechanism for the appropriate public body or passenger transport authority to get the highest quality of service, stations and rolling stock and the best protection for people. What does he rest his case on? I simply do not believe that officials at the Department for Transport will make the proposed centralised process easier. 
On the subject of the costs that might increase, my hon. Friend says that PTEs are not fully exposed to the consequences of their decisions. He has failed to provide evidence that actual costs have been placed on the public sector by the decisions of PTEs. Surely, it would not be beyond the wit of the draftsmen of the Bill to include a provision to enable PTEs to sign franchises, be party to negotiations and specify the right service for their area without being able to write a blank cheque. I suspect that what he is proposing is more bureaucratic and centralised than the current system, which works. 
Strathclyde is one example of a local body using its position to try to gain advantage but not going outside the period in which it constitutionally had to sign the contract. The nature of devolution and decentralised decision-making bodies is that decentralised bodies with elected representatives will occasionally do things that are uncomfortable and awkward for the centre. My hon. Friend's dangerous centralising argument seems to be that if PTEs are difficult, all power will go to the Secretary of State for Transport. I do not agree with that view. I hope that he did not mean that, but that is what is being proposed, not decentralisation. 
I will seek leave to withdraw my amendment, but I expect that discussion and debate will continue on Report and Third Reading and in the other place, because many members of PTEs representing the great urban conurbations in England believe that the proposals will make their job of providing good public transport facilities that much more difficult. I will leave open until Report and Third Reading the challenge to my hon. Friend to come up with real examples of where extra costs have been incurred because of the existing process. I beg to ask leave to withdraw the amendment. 
Amendment, by leave, withdrawn.

Graham Stringer: I beg to move amendment No. 83, in clause 13, page 12, line 34, leave out subsections (5) to (7).
When there are drafting mistakes, it is not always healthy to say when looking at the legislation that there will be a general exemption below a particular level. It is better to get the legislation right than rely on passing more powers to the Secretary of State, because we may not always have such reasonable Ministers as we have at present.

Tony McNulty: I am grateful to my hon. Friend for explaining those points, with which I broadly agree. The PTE should be allowed to enter into agreements with franchisees and franchise operators, and its right to do so should not be fettered by the need to receive approval from the Secretary of State. The aim of the provisions is not to prevent PTEs from entering into beneficial and necessary agreements with franchisees. The provisions enable the Secretary of State to give broad general approval for agreements between PTEs and franchisees, which means that PTEs will not have to come back repeatedly to him to seek approval for minor routine agreements.
I am mindful that we have previously discussed the notion of Christmas tree legislation and what will be included in the Bill and in subsequent guidance. Let me correct one thing that I said earlier. I was still in 2004 mode, so when I constantly referred to guidance being produced next year, I meant 2005. I have caught up during our deliberations, and I assure hon. Members that I mean that the guidance will be published in 2005. The guidance is being developed in consultation with the Passenger Transport Executives Group and will include the types of agreement to which the Secretary of State will give general approval. We are discussing with the Passenger Transport Executives Group what that should entail.

Greg Knight: Will the Minister be a little more specific about the publication of the guidance? We are in January, and saying that the guidance will be published this year could mean that it will be published within anything from one week to almost a year. Can he give us any indication as to whether the guidance will be published before the predicted summer recess or in the early part of this year? Can he be a bit more specific about when we will be able to see the guidance?

Tony McNulty: If I was in flippant mode, which of course I am not, I would say that the guidance will be available before 31 December 2005. However, as I  indicated earlier, I hope that I can get the high-level elements of what will be contained in the guidance to the Committee before we finish our deliberations. That will be a first cut—a first look at the high-level elements of what will be in the guidance. As soon as possible after what I hope will be the successful passage of the Bill through the parliamentary process, we plan to be at a stage where the guidance will be ready to go out to consultation in a more formal sense, and hope that it will be in place and dealt with by summer 2005. We might ask who knows what impending activities might intervene between now and the summer, but I welcome the notion that the guidance should be ready and in place prior to any summer recess—a timetable that I shall certainly work towards.

Greg Knight: I am grateful to the Minister for that information, which is helpful to the Committee. May I underline how important it is for him to publish the headline parts of the guidance before Report? That will enable hon. Members in the Committee and in the House to make points on Report that they feel are crucial in relation to what should be included in the guidance when it finally crystallises.

Tony McNulty: I am keenly aware that it will aid the scrutiny process if the publication at least of the shape and form of the guidance is in the public domain so that the points that I have made—if people are being ungenerous, they might say that I have sought to hide behind them during our deliberations—will be more exposed and give hon. Members the assurances that they seek. We are not trying to get rid of the notion of agreements with the PTEs and franchisees. Clearly there will be agreements where it is right for PTEs to enter into with franchisees as they will be beneficial for the working of railways.
Within the context of the White Paper and our aims of controlling and driving down costs and driving up performance and streamlining the franchise process, the PTEs should assess the agreements that they enter into to determine those that are beneficial. We deal with that in the guidance. Therefore these provisions will mean that for agreements that do not come under the general approval of the Secretary of State, PTEs will have to justify and elaborate a little more why they are necessary and beneficial. No one would oppose the need to ensure that PTEs should enter only into agreements that are necessary and beneficial. Much of that will be discussed and determined with the Passenger Transport Executives Group through guidance. 
We are not against the agreements. This is about what should be disposed of through general agreements. We all agree that we do not want PTEs to go back and forth for every little change or to get permission for every single agreement. Let us determine what can be discussed that way in the general sense and what agreements are far more substantive and perhaps need to be discussed further with the Secretary of State. That is all that the clause seeks to do. I hope that crystallisation, clarity and elaboration will follow in due course with guidance. In  that context I ask my hon. Friend to withdraw the amendment. I have not forgotten the point about reassurance on existing co-signatory status for PTEs, but that belongs more to the next set of amendments, so we will discuss it then.

Graham Stringer: I am grateful for that explanation and reassurance. I ask my hon. Friend to reflect a little on what he has just said about the Government's intentions to drive up performance and efficiency and to drive down costs. The Committee would agree with all of that but there is a dangerous connection that somehow the Secretary of State and officials at the Department for Transport know better how to do these things than people in local areas. I am a strong supporter of this Government, but the evidence is not always there that officials and Ministers in the Department for Transport know best how to drive down costs. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Question proposed, That the clause stand part of the Bill.

David Clelland: I do not oppose the question, but it is worth repeating an important point of principle here. My hon. Friend the Member for Manchester, Blackley reiterated the point in relation to devolution and local power. He is not a supporter of regional government, but is nevertheless a supporter of the concept of devolution. Notwithstanding the result of the referendum in the north-east, which I greatly regret, the old wisdom that devolution is a process, not an event, remains true. Some of us are concerned that these measures will be seen as centralising rather than decentralising, and as such contrary to the policies on which our party stood at the last election and will no doubt stand at the next election. I hope that Ministers will reflect on those issues between now and Report to see what can be done to overcome the concerns that those of us who want to continue the devolution process have about the clause.

Tony McNulty: With the greatest respect to my hon. Friend, I profoundly disagree with him. There is a range of ways in which one can decentralise and devolve power. One way is simply to move things on to an absolutely federal and regional basis and have all the powers at local and regional level, but that also involves financial accountability. Another way is to enter into an agreement about what the centre should do and what the locality should do in terms of proper devolution. Again, that involves a financial trail and financial accountability. What we are doing is not contrary to the thrust of the rest of the Bill in terms of devolving power to local level, but local devolution and decision making must come with clarity and financial accountability. That is all we seek to achieve in this clause and other clauses. I ask the Committee to resist my hon. Friend's objection to the clause.
Question put and agreed to. 
Clause 13 ordered to stand part of the Bill.

Column Number: 141

Clause 14Repeals and savings relating to Passenger Transport Executives

Repeals and savings relating to Passenger Transport Executives

Graham Stringer: I beg to move amendment No. 85, in page 13, line 37, leave out 'Subject to subsection (3),'.

David Amess: With this it will be convenient to discuss the following amendments: No. 86, in page 13, line 40, leave out 'or in section 13'.
No. 87, in page 13, line 41, leave out subsection (3).

Graham Stringer: I shall not repeat the discussion that we had on clause 13 and my disagreements with the regulatory impact assessment's evaluation of the costs of the current franchise arrangements. What is slightly dangerous about this clause is that it is potentially retrospective legislation. The Minister has said that he will explain the Government's position and whether they intend to use the powers in the clause to amend the two current franchise agreements. I think that it would be wrong if they changed those two franchises, but I am happy at this stage to listen to the Minister's explanation as to whether that is their intention.

Tony McNulty: Like my hon. Friend, I shall not rehearse all the arguments about co-signatory status or otherwise, but this is my opportunity to give him the assurances that I hope he is seeking. I agree with him that Centro PTE should remain party to the central franchise agreement. Therefore, I can state now that these powers will not be used to remove Centro as a party to the central franchise before the end of that franchise in 2006.
The Northern franchise—the other one that is currently co-signed by PTEs—was signed only in October, and we have never considered removing the PTEs from it immediately. Therefore, the PTEs will remain a party to the Northern franchise too for the time being. I say ''for the time being'' because in advance of any future re-specification of that franchise we would consider whether it would be beneficial to remove the PTEs as co-signatories. At the moment, however, neither I nor anyone else knows the exact nature of that re-specification and quite when it will be. As I understand it, the first opportunity for re-specification of the Northern franchise is 2006. I do not think that it is appropriate for us to utilise the powers in any way, shape or form before the re-specification, but who knows what that will be? In terms of the immediate future between now and the end of the central franchise, it is not our intention to remove PTEs as co-signatories. 
In the context of the newly signed Northern franchise, the first opportunity for any re-specification will not be until 2006 and I would not envisage the Government using any power between now and then. I do not know what the re-specification will entail and what shape or form it will take; it will be a matter for discussion at the time. It is profoundly not our intention before securing Royal Assent for the Bill by May, or whenever the parliamentary process allows, to put hobnail boots on and throw our weight around in respect of these powers with franchises to which PTEs  are currently co-signatories. In the light of that assurance, I hope that my hon. Friend will ask leave to withdraw the amendment.

Graham Stringer: I am 70 per cent. reassured by the Minister's response, which is sufficient for me to withdraw the amendment. I know that Ministers hate hypothetical questions and the use of words such as ''significant'' that are subject to all sorts of interpretations, but I seek from my hon. Friend, preferably in writing after this sitting, reassurances about the basis on which he would consider intervening in the Northern franchise in 2006. One would expect any responsive rail service to change; the travelling public changes and so does the economy, and one would expect there to be changes and improvements, even if there were only tiny changes in the specifications of services. I want reassurance from my hon. Friend that if the nature of the franchise was not fundamentally changed or in a sneaky sort of way extended for an extra 10 years—I do not know if that is possible as I have not seen the wording—or no extra burden was placed on the Treasury, which has been a consistent refrain of my hon. Friend, he would not unreasonably intervene.

Greg Knight: Does the hon. Gentleman agree that it is important that the Committee knows whether the Minister is prepared to write the letter that he requested—I presume that it would be copied to other members of the Committee—because it may change how we view the matter on Report?

Graham Stringer: I am grateful for the hon. Gentleman's intervention. Before I withdraw the amendment, I would be happy to give way to the Minister if he can say whether he will write to me and to other members of the Committee.

Tony McNulty: I am always delighted to engage in correspondence with my hon. Friend. I will write to him in the terms he outlined and in the context of our brief debate on the amendment.

Greg Knight: With copies to the Committee?

Tony McNulty: I will send copies of anything that I write to one member of the Committee to the other members.

Graham Stringer: With that delightful intervention, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. 
Question proposed, That the clause stand part of the Bill.

David Wilshire: I will not delay the Committee but I may need to apologise to the Minister. Earlier, I said that he was not interested in fairness; he has been equally fair and nasty to both sides of the Committee, having for years dismissed all my amendments and now all his hon. Friends' amendments.

Tony McNulty: Thank you.
Question put and agreed to. 
Clause 14 ordered to stand part of the Bill.

Clause 15 - Duty of Secretary of State and Transport for London to co-operate

Mark Field: I beg to move amendment No. 34, in page 15, line 3, after 'services', insert ', within Greater London,'.

David Amess: With this it will be convenient to discuss the following amendments:
No. 35, in page 15, line 3, after 'services', insert 
', within Greater London and an area no further than five miles from the border with Greater London,'. 
No. 36, in page 15, line 3, after ''services'', insert 
', within the boundaries of the M25 motorway,' 
No. 37, in page 15, line 13, leave out paragraph (b). 
No. 38, in page 15, line 14, leave out 'places outside Greater London' and insert 
'from a mainline terminus in Greater London'.

Mark Field: We now come to the London aspect of the Bill. I share some of the concerns expressed by the hon. Members for Manchester, Blackley and for Tyne Bridge about the relationship between central Government and local devolved authorities. Everyone would accept that the Secretary of State should have a duty and responsibility to co-operate with Transport for London. Therefore, there is little dispute that there needs to be some sort of co-ordination. However, we on the Conservative Benches wish to articulate a number of concerns, and I hope that I will be allowed to give a bit of background, which I suspect will preclude the necessity for a stand part debate once the amendments have been discussed.
I stress that the Conservatives have a distinctive and positive vision of the running of the railways in the capital, notwithstanding the concerns that we are expressing in these amendments. The key question is, for whose benefit should our railways be run? The Government's vision, as set out in the Bill, is for a Treasury-led rail system beholden all too often to politicians and specifically to the Secretary of State for Transport as well as the Chancellor of the Exchequer. Whether in Scotland, Wales, or here in the capital, where the Mayor of London should have more authority, our contention is that passengers' interests should be key. With that in mind, it is surely not too much to expect the train operating companies to have a greater say. After all, I hope that the Minister will agree that those organisations are often closest to the needs of the customers—the fare-paying public. 
Conservatives in London entirely accept the need for a strategic body co-ordinating transport within the capital, but we aim to make Transport for London a streamlined and, above all, accountable operation concentrating on delivering an optimum transport  service at the most efficient cost. We anticipate that the role of a strategic body is to work with both public and private service operators to provide a safe, punctual, comfortable and responsive service to meet the needs of London's travelling public. In short, we do not believe that the role or remit of Transport for London should be broadened. It should not be handed either control or responsibility for further parts of the transport system in London until it gets the management of the parts over which it currently has control right.

David Wilshire: I listened with great care to the precise words that my hon. Friend used. In arguing that no more responsibility should be given to Transport for London within London, is he also saying that nothing more should be given to it outside London?

Mark Field: I know that this matter is very close to my hon. Friend's heart, as his constituency abuts Greater London. Many people who go through places such as Staines and Shepperton might assume that they are in the capital, but I appreciate his concerns. If he will forgive me, I will come to those matters when dealing with some of the specifics of the amendments. I know that he has tabled amendments dealing with the concerns of many people who live in the home counties but rely on rail travel into central London. He rightly alludes to the fact that the suggestion from the Government is that far more power would be in the hands specifically of Transport for London and by implication of the Mayor of London, who is in no way accountable to my hon. Friend's constituents, although he is to mine and to those of the Minister in Harrow, East.
The amendments are, in part, probing amendments. It is accepted that the boundaries of Greater London are historic only in the sense that the Greater London council was created in 1965. Although they are not entirely arbitrary, there is still some confusion. I am sure that my hon. Friend will point out that the suggestion was that his constituency should have been part of what became Greater London, and that was a great debate in his area some 35 years ago.

David Wilshire: I am most grateful to my hon. Friend, and I again listened with the greatest of care. It may be that some arbitrary decisions were taken when setting up Greater London, one of which was to include what is now the borough of Spelthorne within it. However, there was such a huge fuss that it was left out. It was anything but arbitrary when my constituency was left out. We want it left out for ever.

Mark Field: I very much take those concerns on board. My hon. Friend will be delighted to learn that it is not in my gift to decide which bits of Middlesex, or former Middlesex, or Surrey should remain in Greater London.

David Wilshire: I am sorry, but a precision of words is necessary. I heard the words ''former Middlesex'' and ''Surrey''. If my hon. Friend were attaching them to my constituency, my constituency is still in God's own county of Middlesex, as is the Minister's constituency; it is most certainly not in Surrey.

Mark Field: As my hon. Friend will recognise, I am not a great geographer at the best of times—[Interruption.] It is only a matter of time.
As I said, we tabled probing amendments in order to debate which areas should be within the confines of the power of Transport for London, in so far as the Government get their way and can extend the powers beyond the boundaries of the Greater London authority. We must ask how best to ensure continuity for the key stakeholders—the passengers. It is possible that dividing at the M25 would be a better guide, but parts of Surrey, large parts of south Hertfordshire, and a big conurbation around Watford would feel very differently about being included within TFL's powers. 
I should be interested in the Minister's views about substitution services—for example, bus for rail. I ask him to explain how the current system operates. Although we accept that there have been vast improvements in capacity in London, which may be subject to the jealous eye of people outside, they have come at great costs, which I suspect many in the home counties would be unwilling to bear. 
How does the Minister envisage the operation changing under the new regulations for bus substitution services? They are increasingly important given the large-scale investment that continues in the infrastructure of the railway system. Substitution has almost become the norm in many parts of suburban London in recent years, especially at weekends and during the summer. There has been successful substitution when planned works have closed down the tube. How would that co-ordinate with companies outside Greater London? 
The Conservative party accepts the case for London control of rail services in the capital and would like the greater influence that Transport for London could have over London commuter rail services, fares and station standards to be accompanied by moves to make that body more directly accountable. As the Minister, who represents a London constituency, will accept, there is little doubt that for residents, transport is one of the key London issues, especially as so many of the powers have been devolved from Parliament to the Greater London authority. However, they are concerned that too little of the financial authority has been devolved with it, which gives the impression of a power grab rather than anything else. Many Londoners are worried about the Mayor of London's track record, which does not inspire much confidence. 
It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order. 
Adjourned till this day at half-past Two o'clock.